2018-06-07

Fed Balance Sheet Contracts By $8.3bn

The Fed balance sheet contracted by $8.3 billion in the week ended June 6. Of that total, $9.2 billion was treasuries. All of it likely hit on May 31 when a large amount of treasuries matured. The S&P 500 Index did drop that day, but it rallied for the week.

The S&P 500 has rallied 3.3 percent since December 27, 2017 (last Wednesday of the year) and the Fed balance sheet has contracted 2.9 percent.

The Fed has three weeks left in June to reduce its balance sheet by $25.5 billion if it wants to hit the $90 billion target for the quarter. Another large Fed maturity date comes on June 30.